Excerpts from “Breaking Smart”


Original article by Venkat Rao.


An in-depth exploration of Andreesen’s “Software is eating the world”. Peak centralization is said to be year 1974 and since then agile software type tinkering and thinking has been winning the way forward. The essays discuss the engine, the discontent establishment which pines for pastoral entrenched way of life and projects the future as higher technology view of things as they are under appreciating and resisting that the very evolution of the technology done optimally opens up possibilities that were previously unconsidered.

Henry Ford: “My customers would have asked for faster horses”

Steve Jobs: “They’ll learn” – his response to whether the masses will adopt touchscreens and abandon keyboards

There is certain inevitability to technological evolution, and a certain naivete to certain patterns of resistance. Technological evolution is path-dependent in the short term, but not in the long term.

Pastoral visions are a direct result of Promethean periods of rapid evolution. Pastoral utopias are where the victors of particular historical finite games hope to secure their gains and rest indefinitely on their laurels. When pastoral fantasies start to collapse under the weight of their own internal contradictions, long-repressed energies are unleashed. The result is a societal condition marked by widespread lifestyle experimentation based on previously repressed values.

  1. Technological Unemployment: The debate around technological unemployment and the concern that “this time it is different” with AI and robots “eating all the jobs.”
  2. Inequality: The rising concern around persistent inequality and the fear that software, unlike previous technologies, does not offer much opportunity outside of an emerging intellectual elite of programmers and financiers.
  3. “Real” Problems: The idea that “real” problems such as climate change, collapsing biodiversity, healthcare, water scarcity and energy security are being neglected, while talent and energy are being frivolously expended on “trivial” photo-sharing apps.
  4. “Real” Innovation: The idea that “real” innovation in areas such as space exploration, flying cars and jetpacks has stagnated.
  5. National Competitiveness: The idea that software eating the world threatens national competitiveness based on manufacturing prowess and student performance on standardized tests.
  6. Cultural Decline: The idea that social networks, and seemingly “low-quality” new media and online education are destroying intellectual culture.
  7. Cybersecurity: The concern that vast new powers of repression are being gained by authoritarian forces, threatening freedom everywhere: Surveillance and cyberwarfare technologies (the latter ranging from worms like Stuxnet created by intelligence agencies, to drone strikes) beyond the reach of average citizens.
  8. The End of the Internet: The concern that new developments due to commercial interests pose a deep and existential threat to the freedoms and possibilities that we have come to associate with the Internet.

Power is zero-sum because it involves control over other people. Innovation can in fact be defined as ongoing moral progress achieved by driving directly towards the regimes of greatest moral ambiguity, where our collective demons lurk. These are also the regimes where technology finds its maximal expressions, and it is no accident that the two coincide. Genuine progress feels like onrushing obscenity and profanity, and also requires new technological capabilities to drive it. The subjective psychological feel of this evolutionary process is what Marshall McLuhan described in terms of a rear-view mirror effect: “we see the world through a rear-view mirror. We march backwards into the future.” Today, our collective rear-view mirror is packed with seeming profanity, in the form of multiple paths of descent into hell. Among the major ones that occupy our minds are the following:

The basic answer to the non-question of “inequality, surveillance and everything” is this: the best way through it is through it. It is an answer similar in spirit to the stoic principle that “the obstacle is the way” and the Finnish concept of sisu: meeting adversity head-on by cultivating a capacity for managing stress, rather than figuring out schemes to get around it.  Mechanisms we need for working through are the generative, pluralist ones we have been refining over the last century: liberal democracy, innovation, entrepreneurship, functional markets. It is crucial to limit ourselves and avoid the temptation of reactionary paths suggested by utopian or dystopian visions, especially those that appear in futurist guises. The idea that forward is backward and sacred is  profane will never feel natural or intuitive.

Authoritarian goal-driven problem-solving follows naturally from the politician’s syllogism: we must do something; this is something; we must do this. Such goals usually follow from gaps between reality and utopian visions. Solutions are driven by the deterministic form-follows-function principle, which emerged with authoritarian high-modernism in the early twentieth century. At its simplest, the process looks roughly like this:

  1. Problem selection: Choose a clear and important problem
  2. Resourcing: Capture resources by promising to solve it
  3. Solution: Solve the problem within promised constraints

This model is so familiar that it seems tautologically equivalent to “problem solving”. It is hard to see how problem-solving could work any other way. This model is also an authoritarian territorial claim in disguise. A problem scope defines a boundary of claimed authority. Acquiring resources means engaging in zero-sum competition to bring them into your boundary, as captive resources. Solving the problem generally means achieving promised effects within the boundary without regard to what happens outside. This means that unpleasant unintended consequences — what economists call social costs — are typically ignored, especially those which impact the least powerful.

Choosing a problem based on “importance” means uncritically accepting pastoral problem frames and priorities. Constraining the solution with an alluring “vision” of success means limiting creative possibilities for those who come later. Innovation is severely limited: You cannot act on unexpected ideas that solve different problems with the given resources, let alone pursue the direction of maximal interestingness indefinitely. This means unseen opportunity costs can be higher than visible benefits. You also cannot easily pursue solutions that require different (and possibly much cheaper) resources than the ones you competed for.This is not a process that tolerates uncertainty or ambiguity well, let alone thrive on it. Even positive uncertainty becomes a problem: an unexpected budget surplus must be hurriedly used up, often in wasteful ways, otherwise the budget might shrink next year. Unexpected new information and ideas, especially from novel perspectives — the fuel of innovation — are by definition a negative, to be dealt with like unwanted interruptions.

Contrast this to the networked approach. It does not begin with utopian goals or resources captured through specific promises or threats. Instead it begins with open-ended, pragmatic tinkering that thrives on the unexpected. The process is not even recognizable as a problem-solving mechanism at first glance:

  1. Immersion in relevant streams of ideas, people and free capabilities
  2. Experimentation to uncover new possibilities through trial and error
  3. Leverage to double down on whatever works unexpectedly well

Tinkering can look like play or procrastination but is actually the primary way to stay sensitized to developing opportunities or threats. The diversity of individual perspectives coupled with the law of large numbers (the statistical idea that rare events can become highly probable if there are enough trials going on). If an increasing number of highly diverse individuals operate this way, the chances of any given problem getting solved via a serendipitous new idea slowly rises. This is the luck of networks. Serendipitous solutions are not just cheaper than goal-directed ones. They are typically more creative and elegant, and require much less conflict. Sometimes they are so creative, the fact that they even solve a particular problem becomes hard to recognize. For example, telecommuting and video-conferencing do more to “solve” the problem of fossil-fuel dependence than many alternative energy technologies, but are usually understood as technologies for flex-work rather than energy savings. 

Ideas born of tinkering are not targeted solutions aimed at specific problems, such as “climate change” or “save the middle class,” so they can be applied more broadly. As a result, not only do current problems get solved in unexpected ways, but new value is created through surplus and spillover. The clearest early sign of such serendipity at work is unexpectedly rapid growth in the adoption of a new capability. This indicates that it is being used in many unanticipated ways, solving both seen and unseen problems, by both design and “luck”. From the inside, serendipitous problem solving feels like the most natural thing in the world. From the perspective of goal-driven problem solvers, however, it can look indistinguishable from waste and immoral priorities.

Organizational structures follow from which of the above strategies they were born from. Where a goal-driven strategy succeeds, the temporary scope of the original problem hardens into an enduring and policed organizational boundary. Temporary and specific claims on societal resources transform into indefinite and general captive property rights for the victors of specific political, cultural or military wars.

We form extractive institutions designed not just to solve a specific problem and secure the gains, but to continue extracting wealth indefinitely. Whatever the broader environmental conditions, ideally wealth, harmony and order accumulate inside the victor’s boundaries, while waste, social costs, and strife accumulate outside, to be dealt with by the losers of resource conflicts.

Where extractive institutions start to form, it becomes progressively harder to solve future problems in goal-driven ways. Each new problem-solving effort has more entrenched boundaries to deal with. Solving new problems usually means taking on increasingly expensive conflict to redraw boundaries as a first step. In the developed world, energy, healthcare and education are examples of sectors where problem-solving has slowed to a crawl due to a maze of regulatory and other boundaries. The result has been escalating costs and declining innovation — what economist William Baumol has labeled the “cost disease.”

The cost disease is an example of how, in their terminal state, goal-driven problem solving cultures exhaust themselves. Without open-ended innovation, the growing complexity of boundary redrawing makes most problems seem impossible.  This is the zero-sum logic of mercantile economic organization, and dates to the sixteenth century. In fact, because some value is lost through conflict, in the absence of open-ended innovation, it can be worse than zero-sum: what decision theorists call negative-sum (the ultimate example of which is of course war). By the early twentieth century, mercantilist economic logic had led to the world being completely carved up in terms of inflexible land, water, air, mineral and — perhaps most relevant today — spectrum rights. Rights that could not be freely traded or renegotiated in light of changing circumstances. This is a grim reality we have a tendency to romanticize. As the etymology of words like organization and corporation suggests, we tend to view our social containers through anthropomorphic metaphors.

We extend metaphoric and legal fictions of identity, personality, birth and death far beyond the point of diminishing marginal utility. We assume the “life” of these entities to be self-evidently worth extending into immortality. We even mourn them when they do occasionally enter irreversible decline. Companies like Kodak and Radio Shack for example, evoke such strong positive memories for many Americans that their decline seems truly tragic to many, despite the obvious irrelevance of the business models that originally fueled their rise. We assume that the fates of actual living humans is irreversibly tied to the fates of the artificial organisms they inhabit. 

The dark side of such anthropomorphic romanticization is what we might call geographic dualism: a stable planet-wide separation of local utopian zones secured for a privileged few and increasingly dystopian zones for many, maintained through policed boundaries. The greater the degree of geographic dualism, the clearer the  divides between slums and high-rises, home owners and home renters, developing and developed nations, wrong and right sides of the tracks, regions with landfills and regions with rent-controlled housing.  And perhaps the most glaring divide: secure jobs in regulated sectors with guaranteed lifelong benefits for some, at the cost of needlessly heightened precarity in a rapidly changing world for others.In a changing environment, organizational stability valued for its own sake becomes a kind of immorality. Seeking such stability means allowing the winners of historic conflicts to enjoy the steady, fixed benefits of stability by imposing increasing adaptation costs on the losers.

The antidote to extractive institutions is enabled by the idea that speech and people are free from the narrow control of authorities and owners. This allows the flourishing of pluralist institutions which  are open, inclusive and capable of creating wealth in non-zero-sum ways.  If the three most desirable things in a world defined by organizations are location, location and location,1 in the networked world they are connections, connections and connections.They are comprised of streams such as the streets of a city, the Slik Road from Europe to Asia, cafes. Permissionless access to others’ ideas. Digital streams are new iteration and previously geography dominated the streams, we are now inverted with the streams dominating the geography. In the past you needed proximity to Silicon Valley, but now access can be achieved thru github. What makes streams ideal contexts for open-ended innovation through tinkering is that they constantly present unrelated people, ideas and resources in unexpected juxtapositions.

This happens because streams emerge as the intersection of multiple networks.  As a result of such unexpected juxtapositions, you might “solve” problems you didn’t realize existed and do things that nobody realized were worth doing. For example, seeing a particular college friend and a particular coworker in the same stream might suggest a possibility for a high-value introduction: a small act of social bricolage. Because you are seen by many others from different perspectives, you might find people solving problems for you without any effort on your part. A common experience on Twitter, for example, is a Twitter-only friend tweeting an obscure but important news item, which you might otherwise have missed, just for your benefit.

By contrast…when you are sitting in a traditional office, working with a laptop configured exclusively for work use by an IT department, you receive updates only from one context, and can only view them against the backdrop of a single, exclusive and totalizing context. Despite the modernity of the tools deployed, the architecture of information is not very different from the paperware world. If information from other contexts leaks in, it is generally treated as a containment breach: a cause for disciplinary action in the most old-fashioned businesses. People you meet have pre-determined relationships with you, as defined by the organization chart. If you relate to a coworker in more than one way (as both a team member and a tennis buddy), that weakens the authority of the organization. The same is true of resources and ideas. Every resource is committed to a specific “official” function, and every idea is viewed from a fixed default perspective and has a fixed “official” interpretation: the organization’s “party line” or “policy.”

This has a radical consequence. When organizations work well and there are no streams, we view reality in what behavioral psychologists call functionally fixed 3 ways: people, ideas and things have fixed, single meanings. This makes them less capable of solving new problems in creative ways. In a dystopian stream-free world, the most valuable places are the innermost sanctums: these are typically the oldest organizations, most insulated from new information. But they are also the locus of the most wealth, and offer the most freedom for occupants. In China, for instance, the innermost recesses of the Communist Party are still the best place to be. In a Fortune 500 company, the best place to be is still the senior executive floor.When streams work well on the other hand, reality becomes increasingly intertwingled (a portmanteau of intertwined and tangled), as Ted Nelson evocatively labeled the phenomenon.

People, ideas and things can have multiple, fluid meanings depending on what else appears in juxtaposition with them. Creative possibilities rapidly multiply, with every new network feeding into the stream. The most interesting place to be is usually the very edge, rather than the innermost sanctums. In the United States, being a young and talented person in Silicon Valley can be more valuable and interesting than being a senior staffer in the White House. Being the founder of the fastest growing startup may offer more actual leverage than being President of the United States.We instinctively understand the difference between the two kinds of context. In an organization, if conflicting realities leak in, we view them as distractions or interruptions, and react by trying to seal them out better. In a stream, if things get too homogeneous and non-pluralistic, we complain that things are getting boring, predictable, and turning into an echo chamber. We react by trying to open things up, so that more unexpected things can happen.

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